"In the future there will be no diplomacy and no diplomats."
Graf Nesselrode, 1859.

Monday, June 14, 2010

THE B[RITISH]P[ETROLEUM] PROBLEM IN ANGLO-AMERICAN RELATIONS: A COMMENT

"Barack Obama knows language and innuendo: he will know what he’s doing by deploying what Boris Johnson rightly calls “anti-British rhetoric” in the BP disaster. BP has not –for many years – stood for British Petroleum’ – you won’t find the two words anywhere in its annual report. But you hear them plenty tripping off the presidential tongue, as if to point the finger on the other side of the Atlantic. It makes you wonder how highly he values UK-US relations: Bush was genuinely grateful for the fact that Britain was America’s most dependable ally in Iraq and Afghanistan. It’s hard to imagine Bush using the rhetoric that Obama has so quickly resorted to. It does make you wonder: is there still a “special relationship” or is America just not that into us?

When Piper Alpha exploded in 1988 and killed 162 in the North Sea, no one in Britain spoke suggestively about an American company. Where the parent company is domiciled does not matter: you get British companies whose share capital can be owned by various people. BP is 40% owned by British shareholders and 39 perccent owned by American ones: its board has six Americans and six Brits. This disaster happened on an American-owned, Korean-built rig leased by BP’s American subsidiary. But to listen to Obama, it is as if a few blokes from Stoke-on-Trent sailed over, and drilled a wildcat well – then buggered off and left Uncle Sam to suffer all the damage....

There is fault everywhere in this disaster. Doubtless it deflects anger from Obama and other senior American politicians to ramp up anti-British sentiment – when you consider the appalling performance of BP’s chief executive, and Fergie on Oprah, there is reason to believe that Britain’s reputation in America stands at its lowest ebb since 1776. This has a tangible effect. As Allister Heath argues in City AM today, British companies are reporting that it’s harder to do business over there. Obama is talking about stopping BP dividends – £1 in every £6 paid in dividends in Britain comes from BP. To damage BP's dividend payment scheme is to damage British pensioners: you can't just hit a 'company' without hitting either its customers, or its investors (in this case, several million British pension savers)".

"Tony Hayward has been lambasted for his inept handling of BP’s oil spill in the Gulf of Mexico. But Barack Obama, the US president, and his administration have done no better. Indeed, their crudely populist response to the spill threatens to make what is already a bad situation a great deal worse. There has been far too much posturing by the US administration. This was bad enough when it was confined to rhetoric – the faintly xenophobic harping on about “British Petroleum” (a name the company hasn’t used since 1998), or the coarse threats to keep the government’s boot on BP’s throat....

The administration must curb the urge to hammer BP in public. The objective now must be to restore confidence in the clean-up operation. There is plenty of time for blame to be apportioned. What is needed is to get the spill under control and the beaches cleaned. It is right that BP should be made to pay for the consequences of the spill. But the administration should remember that at no time has the company sought to shirk this responsibility. The public demands for a dividend cut are unnecessary. It is the responsibility of BP’s directors to ensure the company can meet all its obligations, including the spill costs. The White House should trust them to discharge it. BP has, after all, no incentive whatever to be unco-operative. A third of the company’s operating assets are in the US. Tens of thousands of its employees are based there. Were it to lose its position in the country, its whole future would be cast into doubt. Mr Obama should stop treating BP as a hostile and alien entity. Much more would be achieved if the administration worked with the company rather than kicked it endlessly in public".

Leader, "Editorial: US must hit reset button with BP," 11 June 2010, in www.ft.com

"For the purposes of our enquiry, however, America may be largely written off since, comprehensibly, she neither lives, nor desires to live, in touch with reality so long as filmland is open to her, and she has a good spell of illusion still ahead. What is important to remember, however, is that, along with much growing enlightenment, the American bonnet of 1930 is haunted not only by the isolationist bee, but by the nationalist hornet".

Sir Robert Vansittart [Permanent Under-Secretary of State at the Foreign Office], "An Aspect of International Relations in 1930," 1 May 1930. Documents on British Foreign Policy 1919-1930, Series Ia, Volume VII, London: Her Majesty's Stationery Office, 1975.

The oil spill in the Gulf of Mexico has unveiled a tale of not two cities but two universes. One the one side of the Atlantic, there is an outpouring of emotion, mostly of the negative variety, directed at both the American government in Washington, DC and to the company whose incompetence caused the accident to occur in the first place: BP. It is not my place to play advocate on behalf of BP: it is obvious that the company has shown gross incompetence and perhaps indeed negligence in their operations in the Gulf of Mexico as it pertains to deep water oil drilling. Particularly since this is not the first time, that an accident, albeit not quite of this nature, has occurred in the recent past. It seems that BP, has chosen to operate in a manner which put paid to any idea of rigorous safeguards. In that respect, one would surmise that BP is rather similar to most of his (American) counter-parts, both in the USA and elsewhere. With all that being said, the kvass patriotismus coming out of the American government in the past few weeks is au fond, bewildering in its stupidity and may perhaps cause fundamental damage to Anglo-American relations. As has been pointed out elsewhere (see especially Ian Cowie, "BP-bashing Americans could jeopardise British pensions. They should remember 1988," 1 June 2010, in www.blogs.telegraph.co.uk), one in seven, yes, one in seven British dividends last year were paid by BP. Whose UK shareholders number perhaps upwards of half a million. BP also pays out a huge amount of tax revenue, to her Majesty's Treasury. Tax revenue which the Inland Revenue, desperately needs at the moment. With all of this in mind, facts that one presumes were not entirely unknown to the American administration, one has to wonder about the rationale of the near-xenophobic language being used. Most especially, as many on the other side of the Atlantic have pointed out, the current regime in DC, has scarcely ever cared to use about say Persia, North Korea, Sudan or indeed if it comes to that the PRC. Does the American President need to be reminded that British troops provide the largest non-American contingent in Afghanistan? And, that they performed the same function in both Iraq and in the first Gulf War? Does the American government think that there are volunteers from other countries who are dying of enthusiasm to send their troops to serve with the US army? I for one do not see any. If, as it appears from the statement issued by Number 10 Downing Street on Saturday and other sources, the American leader is going to tone-down his abhorrent rhetoric, then it is none too soon as it relates to good Anglo-American relations. One may only hope that he does so and soon (see: "Gulf Oil Spill: PM's call to President Obama," 12 June 2010, in www.number10.gov.uk/news & Will Heaven,"Cameron has passed the BP test, but not with flying colours," 14 June 2010 in www.blogs.telegraph.co.uk/news).

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About Me

Charles Coutinho, has been a keen student of diplomacy and International affairs since he was a undergraduate. A member of Chatham House; the Royal United Services Institute and the Royal Historical Society in London, he holds a Doctorate in history from New York University. Where he studied with Tony Judt, Stewart Stehlin & McGeorge Bundy. His dissertation topic, was British diplomacy during the 1950s. He has taught diplomatic history at St. Francis College in Brooklyn Heights and in the fall of 2010 gave a talk at West Point Academy on early 20th century diplomatic history. He has recently written for the French online history journal 'Cercles' and the Institue of Historical Research's 'Reviews in History'. He is the Managing Director of a
properties firm in New York
(coutinhoproperties). He was interviewed, in the real estate periodical, The Real Deal's November 2011 issue. A member of the Lotos, National Arts, Metropolitan Opera Clubs and the Princeton Club, he is also President of 'SAC', Sutton Place's premier community organization.